UNITED STATES SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 40116 / June 24, 1998 Administrative Proceeding File No. 3-9630 ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST BETTY ANN RUBIN The Securities and Exchange Commission ("Commission") announced that on June 24, 1998, it issued an Order Instituting Public Administrative Proceeding Pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 against Betty Ann Rubin ("Rubin"). The Order alleges that on February 26, 1997, the U.S. District Court, entered a Judgment of Permanent Injunction and Other Relief permanently enjoining Rubin from future violations of various registration and antifraud provisions of the federal securities laws. Rubin consented to the entry of the injunction without admitting or denying the allegations in the Commission s Complaint. The Commission's Complaint, filed on December 19, 1995, alleged that from about May 1993 through December 19, 1995, Rubin, a Woodland Hills, California resident, Lazar Frederick & Company ("Lazar"), a Beverly Hills, California brokerage firm, and her co-defendants raised approximately $35 million from over 2,000 investors through an oil and gas Ponzi-like scheme involving the fraudulent offer and sale of 29 limited partnerships. The Commission alleged that her activities in conjunction with the offer and sale of these securities violated the registration and antifraud provisions of the securities laws. 1. Violations of the Registration Provisions The Commission alleged that although the partnerships relied on the registration exemption provided by Regulation D, the exemption did not apply for the reason that Lazar, wholly owned by Rubin and the sole sales agent of the partnerships, sold the partnership interests through general solicitation and effected sales to more than the permitted number of non- accredited investors. 2. Violations of the Antifraud Provisions The Commission alleged that Rubin misled investors concerning the use of investor funds and the source of "returns" paid by the 29 partnerships to investors. Rubin, through Lazar, led investors to believe that approximately 51% of their investment would be used by the partnerships to purchase producing oil and gas properties when in fact Weststar Exploration Inc., the partnership operator, and KS Resources, the general partner, used this money to pay their principals, a large portion of the investor "returns," and additional undisclosed compensation to Lazar. A hearing will be scheduled to take evidence on the staff's allegations and to afford Rubin an opportunity to present her defenses. ======END OF PAGE 1====== The purpose of the hearing is to determine whether the allegations are true and whether any remedial action should be ordered by the Commission. ======END OF PAGE 2======